What's your biggest challenge in funding a fix and flip?

This structure explains why institutional players dominate - they likely have the capital, connections, and infrastructure to operate effectively in such an environment.

What are the challenges with this and does this make managing the property vastly more complex?

Challenges?

@Ken Mull, a hostile rental environment is certainly a reason to change your intent. 

However, this comes with the risk that market conditions or interest rates could change, making refinancing or selling more challenging at that time.On the other hand, a conventional 30-year mortgage offers long-term stability and predictability.

Airbnb went heavily into on-platform Experiences in 2016 and realized quickly it had more challenges than expected.

Finding DSCR lenders willing to take a second position can be challenging, as many prefer the security of being in the first lien position.

Many multifamily projects face challenges, including rising interest rates, operational inefficiencies, and decreased valuations, which drive the growing need for alternative financing solutions.This environment presents a unique opportunity for mezzanine debt and preferred equity investors.

Regarding the $1,275 placement fee, I don't think that's too unusual but read your PM agreement and dispute it if it's not included therein, or if it is, challenge it since it took them so long to place a tenant.